Happy Tuesday Hospitalogists!
For those fellow Texas Longhorns fans, I hope you’ve got a clean bill of health after visiting the cardiologist over the weekend.
Onto this week’s news, which includes a roundup of recent notable developments along with an original analysis of health system performance in the first half of 2025.
One more thing: I might host a happy hour or dinner at HIMSS in Las Vegas next March if enough Hospitalogists will be there. Take 2 seconds to help me get a quick headcount: Are you planning to attend HIMSS 2026?
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The most important news from the week |
I started this chart a while back and finished it recently after most major nonprofit health systems reported their financial results in August and September.
TL;DR: nonprofits are experiencing broad-based recovery so far in 1H 2025, marked by solid revenue growth (median rev growth being around 8%) and improving margins for most systems driven by the high utilization environment. However, the rebound remains uneven, with a clear divide between high-performing, diversified operators and those still constrained by cost, locked into regions with lots of consolidation, and ongoing payor dynamics.
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Most health systems saw positive margin change in 1H 2025 with AdventHealth (including its $260M acquisition of ShorePoint from CHS), UPMC, and Ascension being standouts as the latter continues its transformation journey. Other notable players from a patient revenue growth standpoint include Banner Health and Advocate.
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THE WEEKLY EXECUTIVE SUMMARY |
Notable moves, policies, and strategies from around healthcare. |
Ensemble Health Partners, the RCM platform, is reportedly weighing an IPO or private placement in the $13B range after hiring some bankers for the process. Given the rampant interest in RCM and AI-enabled functions throughout the many repetitive processes, I have to imagine it’s a pretty nice premium multiple here. Not knowing RCM valuations or financials super well, Waystar trades at a 17x+ forward EBITDA multiple which would imply Ensemble’s EBITDA somewhere around a billion if my back of the napkin math is right. Back in May, Financial Times reported Warbus Pincus and Berkshire were gearing up for an Ensemble sale in the $12B range, so its valuation has (reportedly) expanded by a billion in just a short 5 months! Prior to THAT sale, Ensemble was valued privately at a reported $5B in 2021. So, in 4 years, one of the best in class RCM vendors has increased 2.6x in valuation. In 2025, Bon Secours Mercy Health owns 41.4% of Ensemble and received a $331M dividend from the investment in 2024, and a $319M cash dividend in 2025 as part of a recapitalization - an insanely successful investment for the $13B health system and allowing them to diversify revenue streams and reinvest that capital into other needed areas across the enterprise.
- Relatedly, Machinify (backed by New Mountain Capital) closed its acquisition of Performant Healthcare for $670M.
Samaritan Health Services and MultiCare announced their intent to merge, which together would create an 18 hospital, 30,000+ employee health system in the Pacific Northwest.
Hospital for Special Surgery (often referred to as a top orthopedic hospital in the country) is teaming up with General Atlantic to launch a nationwide platform of ambulatory surgery centers focused on orthopedic and spine care. They're kicking things off by acquiring Legent Health, an experienced ASC operator, which gives them instant scale to bring best practices across a Texas and Florida footprint of ASCs. HSS’ idea is to bring high-quality orthopedic care closer to patients in lower-cost ASC settings, while giving surgeons equity stakes, clinical freedom, and access to HSS's best-in-class protocols. Seems like a great move in a lucrative space.
United Digestive made a splash (no, not a toilet splash…shudders) acquisition in Florida by acquiring Gastro MD and GI of Greater Orlando, adding 32 GI docs and associated clinicians to its MSO.
Duly Health and Care announced a couple of minor deals in the past week, acquiring primary care practice Woodridge Clinic then buying a minority interest in Valley ASC in partnership with Surgery Partners.
DocGo is acquiring telehealth platform SteadyMD. Shout out to Guy Friedman, what a beast. DocGo is more than just non-emergent medical transportation - the firm also conducts home health visits and remote patient monitoring, so SteadyMD will tap into those segments. 1x multiple on 2025E revenue. SteadyMD’s last financing event was a $25M Series B back in 2021.
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After outperforming on its Q3 earnings, CHS is selling 3 more hospitals to Tenor Health Foundation. HCA also reported its Q3 earnings late last week and outperformed expectations, and Tenet did the same today, although to a more muted investor reaction. Deeper dive on all things public hospital operators in Q3 coming soon.
The AHA is asking the FTC to exclude healthcare folks (doctors included) from updated guidelines on noncompete agreements.
CVS will close 16 Oak Street Health locations as it tightens the ship. Has OSH been impaired yet?
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HLTH attendees learned more about TextQL’s new AI platform, TextQL Healthcare, which can analyze both structured and unstructured data by generating and running SQL and Python code in HIPAA-compliant environments. A strategic partnership with Lumeris announced earlier this month connects TextQL's new platform to Lumeris' extensive data infrastructure to query complex datasets and deliver real-time, actionable insights to care teams without requiring them to write manual SQL queries.
Hinge Health and Omada CEOs told the HLTH crowd that any next wave of IPOs will reward disciplined operators with strong gross margins, free cash flow, and tangible tech leverage. Names to watch for 2026 came up often, from Transcarent to Maven to Sword and Zelis, signaling a tighter but more mature exit market that health systems can partner with confidently.
Optum debuted an AI claims processing platform, leading to faster adjudication and less friction between plans and providers.
AHA’s new AI Assessment Lab will assess and test algorithms specifically built for validating heart health (risk of heart conditions or risk) models. Built with Dandelion Health, the program offers performance and clinical evaluation pathways for cardiovascular risk models. AI assessment and validation seems to be picking up major steam heading into 2026 as enterprises need support understanding who’s actually doing what they say they can do…and who isn’t.
To stave off the ever-marching upward valuation of OpenEvidence, Abridge and Wolters Kluwer previewed their own real-time clinical decision support in the note. The integration targets in-workflow guidance and summarization at the point of care. Next phase of ambient shifts from note making to care guidance, leading to clinical workflow, quality, and other downstream throughput implications.
Mark Cuban stayed with his company line an dcalled for increased price transparency during his keynote address at HLTH, and said Cost Plus Drugs will be participating in the Trump administration’s drug price transparency tool, TrumpRx. How about that?
This was a good roundup from Healthcare Dive on what executives from systems like Houston Methodist, Risant Health, UPMC and Advocate Health discussed how their investments in AI technology have helped improve operations from capacity management to virtual specialty care.
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My favorite reads & resources from the week |
*This read is brought to you by one of my brand partners who help make this newsletter possible!
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Thanks for the read! Let me know what you thought by replying back to this email.
— Blake
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